As the regulatory environment becomes more favorable, Nexstar
Media Group -- the largest owner of U.S. TV stations -- is buying Tegna, another big TV station company, for a deal valued at $6.2 billion, according to the companies.
The combination will
give Nexstar 265 TV stations in 132 of 210 TV markets.
Nexstar currently has more than 200 stations, and Tegna owns 64 TV stations.
Tegna is the largest owner of top network affiliates
stations (ABC, NBC, CBS, and Fox) in the biggest 25 U.S. markets.
This deals come after Tegna abandoned a 2023 $8.6 billion deal with hedge fund operator Standard General.
Under the
Biden Administration’s Federal Communication Commission (FCC), the agency scheduled hearings about the deal. Tegna abandoned the agreement shortly after that news.
Both companies are at
the U.S. ownership limit of 39% coverage of U.S. television households.
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Analysts, however, are projecting the new FCC -- which is already talking about a new deregulatory environment -- will
look at TV station deals of this type more favorably.
“This does not come as a surprise to us,” writes Curry Baker, media analyst of Guggenheim Securities. “The terms of the
transaction are also very much in-line with Nexstar's previous approach to mergers and acquisitions (Tribune, Media General, etc.) -- $22/share cash offer, significant synergies of $300
million.”
He adds: “The FCC, under Chairman Carr, has signaled they are moving forward with a robust deregulatory agenda, and we believe Nexstar has been clear they are looking to
take advantage of this deregulatory back-drop.”
In early Tuesday morning stock market trading, Nexstar’s share was up 6% to $218.68, while Tegna rose 4% to $21.07.